Substitute Senate Bill No. 1193
         Substitute Senate Bill No. 1193

               PUBLIC ACT NO. 97-70


AN ACT CONCERNING LIMITED LIABILITY COMPANIES.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Subdivision (7) of section 34-101
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (7)  "Foreign limited liability company" means
an  entity  that  is:   [(A)   An   unincorporated
association;  (B)  organized]  (A) ORGANIZED under
the laws of a state other than the  laws  of  this
state  or  under  the laws of any foreign country;
[(C)] (B) organized under a  statute  pursuant  to
which  an  [association]  ENTITY  denominated as a
limited  liability  company  may  be  formed  that
affords  to  each of its members limited liability
with respect to the liabilities of the entity; and
[(D)]  (C)  is  not  required  to be registered or
organized under any statute of  this  state  other
than  sections  34-100  to  34-242,  inclusive, AS
AMENDED BY THIS ACT.
    Sec.  2.  Subdivision (9) of section 34-101 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (9)  "Limited  liability company" or "domestic
limited liability company" means  an  organization
having  [two]  ONE  or more members that is formed
under sections 34-100  to  34-242,  inclusive,  AS
AMENDED BY THIS ACT.
    Sec.   3.   Section   34-113  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    A   limited  liability  company  formed  under
sections 34-100 to 34-242, inclusive,  AS  AMENDED
BY  THIS  ACT,  or  a  foreign  limited  liability
company  transacting  business   in   this   state
pursuant  to the provisions of said sections shall
be treated, for purposes of taxes imposed  by  the
laws  of  the  state  or any political subdivision
thereof, in  accordance  with  the  classification
[under  26  C.F.R. Section 301.7701-2] FOR FEDERAL
TAX PURPOSES.
    Sec.   4.   Section   34-121  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    The  articles  of  organization  of  a limited
liability company formed under sections 34-100  to
34-242,  inclusive,  AS AMENDED BY THIS ACT, shall
set forth: (1) A name for  the  limited  liability
company that satisfies the requirements of section
34-102;  [(2)  the  latest  date  upon  which  the
limited liability company is to dissolve; (3)] (2)
if management of the limited liability company  is
vested  in  a  manager or managers, a statement to
that effect; [(4)] (3) the nature of the  business
to be transacted or the purposes to be promoted or
carried out, except that it shall be sufficient to
state,  either  alone  or  with  other business or
purposes,  that  the  purpose   of   the   limited
liability  company  is to engage in any lawful act
or activity for which limited liability  companies
may  be  formed  under  sections 34-100 to 34-242,
inclusive, AS AMENDED BY THIS  ACT,  and  by  such
statement  all lawful acts and activities shall be
within  the  purposes  of  the  limited  liability
company,  except  for express limitations, if any;
[(5)] (4) the  principal  office  address  of  the
limited    liability   company;   [(6)]   (5)   an
appointment of a statutory agent  for  service  of
process  as  required by section 34-104; and [(7)]
(6) any other matter the organizer  or  organizers
determine to include.
    Sec.   5.   Section   34-159  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)   Upon  the  occurrence  of  an  event  of
dissociation under section 34-180, AS  AMENDED  BY
SECTION  8  OF  THIS  ACT,  [which  does not cause
dissolution,] other than an event of  dissociation
as provided in subparagraph (B) of subdivision (3)
of subsection (a) of said section, a  dissociating
member  is  entitled  to  receive any distribution
which the member was entitled to receive prior  to
the   event  of  dissociation.  [If  an  operating
agreement does not provide the amount or a  method
of  determining  the distribution or the manner of
payment of  the  distribution  to  a  dissociating
member,   the   member  shall  receive,  within  a
reasonable time after dissociation, the fair value
of  the member's interest in the limited liability
company as of the date of dissociation based  upon
the  member's right to share in distributions from
the limited liability company.]  UNLESS  OTHERWISE
PROVIDED   IN   WRITING   IN   THE   ARTICLES   OF
ORGANIZATION  OR  OPERATING   AGREEMENT,   OR   AS
OTHERWISE  PROVIDED  IN  SUBSECTION (b) OF SECTION
34-173, AS AMENDED BY SECTION 7 OF THIS  ACT,  THE
DISSOCIATING  MEMBER  SHALL  NOT  BE  ENTITLED  TO
PAYMENT FOR THE MEMBER'S INTEREST IN  THE  LIMITED
LIABILITY  COMPANY  AND,  BEGINNING ON THE DATE OF
DISSOCIATION, THE DISSOCIATING MEMBER  SHALL  HAVE
ONLY THE RIGHTS OF AN ASSIGNEE OF THE DISSOCIATING
MEMBER'S INTEREST IN THE LIMITED LIABILITY COMPANY
AND  THE  DISSOCIATING MEMBER SHALL NO LONGER BE A
MEMBER OF THE LIMITED LIABILITY COMPANY.
    (b)    NOTWITHSTANDING    ANY   PROVISION   OF
SUBSECTION (a) OF THIS SECTION,  DISTRIBUTIONS  TO
MEMBERS UPON AN EVENT OF DISSOCIATION OCCURRING IN
LIMITED LIABILITY COMPANIES FORMED UNDER THE  LAWS
OF  THIS STATE PRIOR TO THE EFFECTIVE DATE OF THIS
ACT SHALL, UNLESS THE MEMBERS UNANIMOUSLY  INCLUDE
A  PROVISION  IN  A  WRITTEN  OPERATING  AGREEMENT
EXPRESSLY ADOPTING THE  PROVISIONS  OF  SUBSECTION
(a)  OF  THIS  SECTION, AS AMENDED BY THIS ACT, BE
DETERMINED IN ACCORDANCE WITH  THE  PROVISIONS  OF
THIS SECTION IN EFFECT PRIOR TO THE EFFECTIVE DATE
OF THIS ACT.
    Sec.   6.   Section   34-172  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  Subject  to  subsections  (b)  and (c) of
section 34-119, an assignee of an  interest  in  a
limited  liability  company may become a member if
and to the extent that (1) the assignor gives  the
assignee  that  right in accordance with authority
described in the  operating  agreement,  [or]  (2)
unless   otherwise   provided  in  writing  in  an
operating  agreement,  at  least  a  majority   in
interest  of the members, other than the assignor,
consent, OR (3) IF THE LIMITED  LIABILITY  COMPANY
HAS  ONLY  ONE  MEMBER,  THE  ASSIGNOR  GIVES  THE
ASSIGNEE THE RIGHT TO BECOME A MEMBER.
    (b)  An  assignee who becomes a member has, to
the extent assigned, the rights and powers, and is
subject  to the restrictions and liabilities, of a
member under the  articles  of  organization,  any
operating agreement and the provisions of sections
34-100 to 34-242, inclusive, AS  AMENDED  BY  THIS
ACT.  An  assignee  who  becomes  a member also is
liable for any obligations of the assignor to make
contributions  under  section 34-151. The assignee
is not obligated  for  liabilities  of  which  the
assignee had no knowledge at the time the assignee
became a member and which could not be ascertained
from  any written records of the limited liability
company kept pursuant to section 34-144.
    (c)   Whether   or   not   an  assignee  of  a
membership interest becomes a member, the assignor
is  not released from his liability to the limited
liability company  under  section  34-151,  unless
otherwise  provided  in  writing  in the operating
agreement or unless the other members  unanimously
consent.
    (d)  Except  as  otherwise provided in writing
in the operating agreement, a member  who  assigns
his  entire  limited  liability company membership
interest ceases to be a  member  or  to  have  the
power  to exercise any rights of a member when any
assignee of his interest  becomes  a  member  with
respect to the assigned interest.
    Sec.   7.   Section   34-173  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  [If]  SUBJECT  TO  SUBSECTION (b) OF THIS
SECTION, IF a member who is an individual dies  or
a  court of competent jurisdiction adjudges him to
be  incompetent  to  manage  his  person  or   his
property,  the  member's  executor, administrator,
guardian,    conservator    or     other     legal
representative  may  exercise  all of the member's
rights for the purpose of  settling  the  member's
estate  or  administering  the  member's property,
including any  power  the  member  had  under  the
articles of organization or an operating agreement
to give an assignment of the  right  to  become  a
member.  [If]  SUBJECT  TO  SUBSECTION (b) OF THIS
SECTION, IF a member is a  corporation,  trust  or
other  entity  and is dissolved or terminated, the
power of that member may be exercised by its legal
representative or successor.
    (b)  SUBJECT  TO  SUBSECTIONS  (b)  AND (c) OF
SECTION 34-119, IF A LIMITED LIABILITY COMPANY HAS
ONLY  ONE  MEMBER  AND  AN  EVENT  OF DISSOCIATION
OCCURS, OTHER THAN AN  EVENT  OF  DISSOCIATION  AS
PROVIDED IN SUBPARAGRAPH (B) OF SUBDIVISION (3) OF
SUBSECTION (a) OF SECTION 34-180,  AS  AMENDED  BY
SECTION 8 OF THIS ACT, THE LEGAL REPRESENTATIVE OR
OTHER SUCCESSOR IN INTEREST MAY, AT  THE  ELECTION
OF SUCH LEGAL REPRESENTATIVE OR OTHER SUCCESSOR IN
INTEREST, BECOME A MEMBER.
    Sec.   8.   Section   34-180  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  [A]  SUBJECT TO SUBSECTION (b) OF SECTION
34-173, AS AMENDED BY SECTION 7  OF  THIS  ACT,  A
person   ceases  to  be  a  member  of  a  limited
liability company upon the occurrence  of  one  or
more  of  the  following  events:  (1)  The member
withdraws  by  voluntary  act  from  the   limited
liability company as provided in subsection (c) of
this section; (2) the member ceases to be a member
of  the  limited  liability company as provided in
section 34-172, AS AMENDED BY SECTION  6  OF  THIS
ACT;  (3) the member is removed as a member (A) in
accordance with the operating  agreement,  or  (B)
unless   otherwise  provided  in  writing  in  the
operating agreement, when the member  assigns  all
of  his  interest in the limited liability company
with the written consent or by an affirmative vote
of  a majority in interest of the members who have
not assigned their interests; (4) unless otherwise
provided  in writing in the operating agreement or
by written consent of all members at the time, the
member  (A) makes an assignment for the benefit of
creditors,  (B)  files  a  voluntary  petition  in
bankruptcy;  (C)  is  adjudicated  a  bankrupt  or
insolvent; (D) files a petition or answer  seeking
for   himself   any  reorganization,  arrangement,
composition,      readjustment,       liquidation,
dissolution  or  similar relief under any statute,
law or regulation; (E) files an  answer  or  other
pleading  admitting  or  failing  to  contest  the
material allegations of a petition  filed  against
him  in  any  proceeding  of  this  nature; or (F)
seeks,  consents   to   or   acquiesces   in   the
appointment  of  a trustee, receiver or liquidator
of the member of all or any  substantial  part  of
his  properties;  (5) unless otherwise provided in
writing in the operating agreement, or by  written
consent  of  all  members at the time, one hundred
twenty  days  after  the   commencement   of   any
proceeding     against    the    member    seeking
reorganization,     arrangement,      composition,
readjustment,  liquidation, dissolution or similar
relief under any statute, law or  regulation,  the
proceeding  has  not  been dismissed, or if within
ninety days  after  the  appointment  without  his
consent  or acquiescence of a trustee, receiver or
liquidator  of  the  member  or  of  all  or   any
substantial    part   of   his   properties,   the
appointment is not vacated or  stayed,  or  within
ninety  days after the expiration of any stay, the
appointment is not vacated; (6)  unless  otherwise
provided in writing in the operating agreement, or
by written consent of all members at the time,  in
the case of a member who is an individual: (A) His
death, or (B) the entry of an order by a court  of
competent     jurisdiction     adjudicating    him
incompetent to manage his person  or  his  estate;
(7)  unless  otherwise  provided in writing in the
operating agreement, or by written consent of  all
members  at the time, in the case of a member that
is a trust or is acting as a member by  virtue  of
being a trustee of a trust, the termination of the
trust, but not merely the substitution  of  a  new
trustee;  (8) unless otherwise provided in writing
in the operating agreement, or by written  consent
of  all  members  at  the  time,  in the case of a
member  that  is  a  separate  limited   liability
company,   the  dissolution  and  commencement  of
winding  up  of  the  separate  limited  liability
company;  (9) unless otherwise provided in writing
in the operating agreement, or by written  consent
of  all  members  at  the  time,  in the case of a
member that is a  corporation,  the  filing  of  a
certificate  of  dissolution or the equivalent for
the corporation or the revocation of  its  charter
and  the  lapse of ninety days after notice to the
corporation of revocation without reinstatement of
its  charter;  (10)  unless  otherwise provided in
writing in the operating agreement, or by  written
consent of all members at the time, in the case of
a member that is an estate,  the  distribution  by
the  fiduciary  of  a  member that is the estate's
entire interest in the limited liability  company;
or  (11)  where  the  limited liability company is
formed to render professional services,  a  member
licensed   or   otherwise   authorized  to  render
professional services in this state or  any  other
jurisdiction   ceases   to   be   so  licensed  or
authorized.
    (b)  The members may provide in writing in the
operating   agreement   for   other   events   the
occurrence  of which result in a person ceasing to
be a member of the limited liability company.
    (c)  Unless  the  operating agreement provides
in writing that a member has no power to  withdraw
by voluntary act from a limited liability company,
the member may do so at any time by giving  thirty
days' written notice to the other members, or such
other notice as provided for  in  writing  in  the
operating  agreement.  If the member has the power
to withdraw but the withdrawal is a breach of  the
operating agreement, or the withdrawal occurs as a
result  of  otherwise  wrongful  conduct  of   the
member,  the limited liability company may recover
from the withdrawing member damages for breach  of
the  operating  agreement  or  as  a result of the
wrongful conduct, including the reasonable cost of
obtaining   replacement   of   the   services  the
withdrawn member was obligated to perform and  may
offset  the  damages  against the amount otherwise
distributable  to  such  member,  in  addition  to
pursuing   any   remedies   provided  for  in  the
operating agreement or otherwise  available  under
applicable  law.  Unless otherwise provided in the
operating agreement, in  the  case  of  a  limited
liability   company   for   a   definite  term  or
particular undertaking, a withdrawal by  a  member
before   the   expiration  of  that  term  or  the
completion of that undertaking is a breach of  the
operating agreement.
    Sec.   9.   Section   34-200  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  A general or limited partnership that has
been converted  to  a  limited  liability  company
pursuant to section 34-199 shall be deemed for all
purposes the same entity that existed  before  the
conversion,  except that the converted entity, its
members and managers shall be governed  solely  by
the  provisions  of  sections  34-100  to  34-242,
inclusive, AS AMENDED BY THIS ACT.
    (b)  The  conversion  shall  take  effect upon
[endorsement of the Secretary of  the  State]  THE
FORMATION  OF  THE  LIMITED  LIABILITY  COMPANY as
provided by section 34-123.  Upon  such  effective
date:  (1)  All  property  owned by the converting
general or limited partnership remains  vested  in
the  converted  entity; (2) all obligations of the
converting general or limited partnership continue
as  obligations  of  the  converted entity; (3) an
action   or   proceeding   pending   against   the
converting  general  or limited partnership may be
continued as if the conversion had  not  occurred;
(4)  an  action  or proceeding pending against any
person in such  person's  capacity  as  a  general
partner   in   a  converting  general  or  limited
partnership may be continued as if the  conversion
had  not  occurred; and (5) all liabilities of any
person in such  person's  capacity  as  a  general
partner   in   a  converting  general  or  limited
partnership,  notwithstanding  the  value  of  the
assets   of  the  converting  general  or  limited
partnership on such effective date, shall continue
as  liabilities  of  such person, except as may be
provided in the operating agreement  with  respect
to  those  liabilities  of  such  person  to other
members of the limited liability company that  has
been converted pursuant to section 34-199.
    (c)  In the case of a limited partnership that
has been converted pursuant to section 34-199, the
articles  of  organization  filed pursuant to said
section  shall   serve   as   a   certificate   of
cancellation of the converting limited partnership
pursuant to section 34-32a.
    Sec.   10.   Section  34-206  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    A  limited  liability company is dissolved and
its affairs shall be wound up upon  the  happening
of the first to occur of the following: (1) At the
time or upon the occurrence of events specified in
writing   in   the  articles  of  organization  or
operating agreement; (2) [written consent]  UNLESS
OTHERWISE  PROVIDED  IN WRITING IN THE ARTICLES OF
ORGANIZATION  OR  OPERATING  AGREEMENT,  UPON  THE
AFFIRMATIVE  VOTE, APPROVAL OR CONSENT of at least
a majority in interest of  the  members;  [(3)  an
event  of  dissociation  of  a  member, unless (A)
within ninety days following the occurrence of any
such  event either (i) the business of the limited
liability company is continued by the  consent  of
at  least  a majority in interest of the remaining
members or (ii) if there  is  only  one  remaining
member, such remaining member consents to continue
the business of the limited liability company  and
admits  an  additional member, or (B) otherwise as
provided in writing in the  operating  agreement;]
or  [(4)]  (3)  entry  of  a  decree  of  judicial
dissolution under section 34-207.
    Sec.  11.  This act shall take effect from its
passage.

Approved May 27, 1997